Immigration is a divisive issue at whose heart heart lie tensions about security, low wages, and a nasty welfare system

As Ed Miliband prepared to give his big immigration speech last week, a cast of characters were dusting down a time-honoured script. Up in Rochdale, the venerable Gillian Duffy was up early, “to do my hair and put on a bit of makeup”, prior to a long day of TV and radio appearances. The Daily Mail accused the Labour leader of “sick hypocrisy“. The British National party chairman, Nick Griffin, seemed to agree, elegantly tweeting that the speech was “patently insecure bullshit”– as well as illustrating the elevated heights to which social media have taken political debate, when one or two impulsive lefties re-tweeted another of his gobbets, about the Labour leader acting as a “recruiting sergeant” for the BNP.

Miliband’s speech was actually careful, nuanced and intelligent: a shame, perhaps, that the surrounding hoo-hah had to star the political equivalents of Widow Twanky, Buttons and Captain Hook.

Here, then, is the real story. For some months the Labour leader has been saying interesting things about the most fundamental aspects of the economy and society. You may have missed them: they tend to be underplayed in the lines his handlers spin to the media, and in the shadow cabinet few seem minded to speak up in support. But in his picture of immigration turning toxic thanks to unregulated labour markets and New Labour being “dazzled” by globalisation, there were increasingly familiar themes. He objects, he says, to “a labour market that is too often nasty, brutish and short term”. And not just that: Britain, he says, should be a country of “rewarding and high-skill jobs”, where “owners, managers and employees see themselves as being part of one shared project”.

Then again, this is the Labour party we are talking about, and the policies supposed to lead us there are, so far, distinctly puny. Miliband suggested increasing the enforcement of the minimum wage and attempting to push recruitment agencies away from filling their books with foreign clients. For five or six years now there has been a lot of excitement on the left about the living wage, and how it might be gently introduced into the economy via the public sector and new demands included in government contracts – which is great, but not any kind of cure for huge swaths of the job market. Much beyond that, you tend to get a lot of talk about the need for a “cultural shift”, which is often another way of saying “don’t know”.

Yet this, unquestionably, is where attention needs to be focused. On the domestic front, just about everything Miliband talks about – tensions around immigration, the so-called squeezed middle, the grim position of the under-30s – is reducible to the same thing: an economy that is fast eating away at people’s security (witness last week’s Guardian story about the 3.6m households only a breath away from poverty), and the ongoing demise of the Real Job. And note the direction in which the Conservatives – and, let’s face it, too many Liberal Democrats – would like to take things: further and further in the same direction, with no thought for the resulting social damage.

A good example: a small part of the immigration issue was addressed when the last government belatedly decided to embrace the EU’s directive on agency workers, whereby after 12 weeks in the same job such employees would have to be granted the same basic conditions as their more protected colleagues. It came into force last year – but the infamous Beecroft report on employment regulation recommended that the government should completely ignore it, and see if the EU would come after them. This is the stupid course advocated by voices who’d have you believe that Britain can be revived via yet another attack on “red tape”, and that bringing social imperatives to bear on the economy is unthinkable.

For Labour, they should be an easy enough target. Far more difficult is the fact that low-wage, insecure, no-prospects jobs have an increasingly symbiotic relationship with our ever-more nasty welfare system. Jobseeker’s allowance is now thoroughly conditional: to be one of its 1.6 million claimants is to effectively agree to take any “reasonable” job offer under pain of having your benefit taken away; if you’re in work, you know full well that the same punitive machinery acts as a disincentive to do anything about your own predicament. What pressure can be brought to bear on companies that are ecstatically happy to employ people on the most abject terms, when two successive governments have built a system to deliver them as many people as they need?

Sit in on any JobCentre interview or spend time around the government’s work programme, and it’s clear that the part of the modern job market they deal with is often a tangle of fake self-employment, temporary contracts and jobs paid in commission. To go back to Miliband, all that points to work that is indeed “nasty, brutish and short term” – but both main parties seem happy to underwrite it.

The upshot of all this is simple, but so at odds with Westminster groupthink that it feels almost funny. To truly turn the heat up on low-end employers, you would have to do away with the current miserable consensus on welfare, bin a good deal of the ideas about benefits and “conditionality” shared by most politicians, and thereby increase the bargaining power of people at the bottom. It would also be an idea to massively increase the reach and clout of trade unions. And how about an Obama-style amnesty for illegal immigrants, so as to come down hard on a part of the economy that not only represents insecurity and exploitation at its worst, but exerts a real downward pull on wages and conditions elsewhere?

At which point – obviously – you reach the stubborn limits of the debate: from even the most supposedly imaginative Labour people as much as any Tories, such heresies would presumably be greeted with sneering derision. But if things are as grave and urgent as the Miliband speech made out, why not?